Lean Six Sigma Wiki

LEAN SIX SIGMA WIKI 23/02/2010

Hi-Tech Aakriti Vig [email protected]

WHAT IS SIX SIGMA:Six Sigma is essentially a comprehensive yet flexible system for achieving, supporting, and maximizing business profits. It is a methodology driven by understanding customer needs, and the disciplined use of data, facts, and statistical analysis to improve and reinvent organizational processes. Six Sigma simply means a measure of quality that strives for near perfection. The term now applies to a disciplined, data-driven approach and methodology for eliminating defects (driving towards six standard deviations between the mean and the nearest specification limit) in any process - from manufacturing to transactional/services and from product to service. A process that has reached the "Six Sigma Level" operates with so little variation that 99.9997% of the time it is defect free. Or in other words, only results in 3.4 defects in one million opportunities. (It should be noted that not all processes need to perform to a Six Sigma level. In most cases, it is simply not cost-effective to be that accurate.

ORIGIN OF SIX SIGMA:Six Sigma methods started in the early 1980s at the Motorola Corporation when it was discovered that products making it through the production process with a high firstpass yield performed better in the field. With this knowledge, Motorola Corporation focused on creating strategies to reduce defects in their processes. In the mid-1980s, Motorola joined forces with other companies, including IBM, to form the Six Sigma Research Institute. Since then, Six Sigma has been proven by many companies as a robust method to provide productivity, quality, customer satisfaction, and other process improvements. Six Sigma has a very strong base in statistics. The chart below indicates the "Bell Curve" that could be drawn based on Mean and standard deviation. It is a statistical phenomenon, where any randomly occurring event, will tend to form a pattern, typically they will cluster around the mean. Without getting deeper into statistics, a curve of that nature is depicted below :

ADVANTAGE OF SIX SIGMA:One of the key advantages to Six Sigma is that it provides a measurable way to track process performance. The performance accuracy of a process is measured with a metric known as the "Sigma Level". The Sigma Level is based upon a comparison of the variability of the outputs versus the performance specifications of the process. GOAL OF SIX SIGMA:The goal of Six Sigma approaches is to reduce variability, improve predictability and quality, by systematically eliminating defects, that is, defects as viewed by customers' eyes.

LEAN SIX SIGMA:Lean refers to a set of processes and improvement techniques that are most effective at delivering greater client value. Lean is about figuring out what the client considers as value and designing the system to meet that - no more, no less. Lean does not mean delivering less, or working harder; it is working smarter by avoiding any activities unrelated to delivering client value. In other words, it is the precise matching of our capabilities to the client's needs or wants. Lean is an industry-proven methodology, that when executed, results in the ability to deliver more value to clients through operational excellence. This is possible through the relentless identification and elimination of "Muda" (loosely translated from Japanese meaning operational inefficiencies or WASTE) from our operating environment. In contrast to Lean, Six Sigma focuses on reducing variability in a process to improve quality, i.e. to ensure quality at source. Lean and Six Sigma are both based on over 50 years of process-improvement experience based on the renowned Toyota Production System from the 1960's, which was developed by Taichi Ohno, the Toyota Executive. Since then, it has evolved through several quality revolutions such as Just-In-Time Production, Lean Manufacturing, Total Quality Management and finally Six Sigma - which was popularized by Motorola and GE.

THE ORIGINS OF LEAN SIX SIGMA:-

THE FIVE PRINCIPLES OF LEAN THINKING

OBJECTIVES O F LEAN THINKING:•

Delivering more value to clients faster, with less waste The objective of Lean is to deliver exactly what the customers need, when and where they need it. Everything else that does not add any value (in the customer's eyes) should be eliminated from the process. Lean does this by focusing on the operating system, management system, and mindsets and behaviors. Typically, there are seven "Wastes" associated with Lean and these are as applicable in services as they are in product value chains :

The Five Principles of Lean Thinking 1. In Lean Thinking "Value" is defined from the customer's perspective. Lean has well developed tools to help capture value. 2. A Value Stream is a sequence of steps taken to create value, and an early activity in Lean Projects is to set out every step in a process, both valueadding and non-value-adding 3. Creating flow, allows value to flow smoothly through the value stream without obstruction 4. Work is pulled by customer and this pull works backwards through the preceding steps until it activates the initial stage of the process. An example is a can of soft drink bought from the store shelf, triggering a chain of activities, up till the manufacturer of the soft drink placing an order for raw materials with its suppliers, manufacturing the soft drink can and sending a delivery to replenish the store shelf. 5. Continuously and relentlessly drive for improvement.

COMBINING LEAN AND SIX SIGMA TOOLS AND METHODS:Combining Lean and Six Sigma tools and methods provides a complete set of tools to approach any process problem. By utilizing lean techniques to eliminate non-value add process steps, (waste), and also applying Six Sigma techniques to reduce variation and defects, the result is a fast efficient process with high quality and few defects.

HOW DOES LEAN SIX SIGMA BENEFIT THE ORGANIZATION While Lean is often seen as just another set of tools, true Lean enterprises (for example, Toyota) recognize that when properly applied, the methodology: • • •

fundamentally changes an organization's culture can be successfully used in all industries despite varying processes and functions, and is built on guiding principles of customer value and waste elimination, which are fundamental to achieving world-class status.

Its goal is growth, not just productivity. Its aim is effectiveness, not just efficiency.

APPLYING LEAN TO GBS ACCOUNTS:Applied to GBS Projects, Lean will not only help us do things better, but it will help us do better things. It can help our clients discover opportunities beyond operations, enhance financial performance and create organizations that have an inherent inclination toward innovation.BS Accounts Any improvement requires effort and investment. If there is no hard saving or visible improvement in quality for Customer and an organization, then the investment is not worthwhile. LSS requires careful assessment and quantifying of the improvement, and then ensuring that the benefit is realized through structured processes. For this reason, the Lean CoE needs to review potential Projects and work with you through a series of selection stages to ensure that there's a sound business case for proceeding with a Lean Project.

LAUNCHING LEAN DEVELOPMENT:Deploying Lean requires a very significant effort from both country management and the practitioners who will be involved. For this reason, gaining buy-in to Lean and building energy around how to use it to add value and to do more with less is critically important. Senior Leaders have an important role to play in espousing Lean as a vehicle for strategic change and in creating the climate for success. Lean Deployments in a country start with a deployment Launch Event for Senior Leaders. The Launch Event aims to build awareness of the approach and the objectives of Lean Projects at Executive level, create excitement and buy-in. The Launch Event also has a fun team building element, as we run the Lean Courier Simulation so leaders have the chance to experience the Lean journey in just one day. This is usually followed by an account team Lean Project kicking off the following day. Is my Project suitable?

Selecting the right project ensures that we are getting maximum benefits out of the investment that we are making. Broadly, to be considered for a Lean Project, and in order to make the most impact, your Project should satisfy the following criteria : • •

• •

Project has completed transition There exist some customer / business pain points e.g. low CSAT, not meeting SLA, higher customer expectation, low or negative profitability, low Employee satisfaction etc. Team should not be very fragmented Total team size of more than 15 people active in the proposed value stream

EXAPMLES OF PROCESS CHANGES BY USING LEAN METHODOLOGY:-er Have you the problem of a client complaining about poor service, poor response time, or perceiving that they are not getting value for money? Is the competition breathing down your neck and able to offer the same service at a lower price? Have you a desire to improve your service far beyond the current level? This page collects together examples of process changes that have emerged through rigorous application of the GBS Lean Methodology, that we know improve service efficiencies and deliver measurable benefits. GBS Lean Coaches define these process improvement best practices as "Benefit Drivers" and have documented the

applicability of each Driver, how to assess the improvement opportunity, and estimated the performance improvements.

Where the Benefit Drivers can help you - typical project challenges: Typical challenges.... There are many and varied types of work in the project that take away from productive time

Actions that can be taken... Rationalize different meetings and reports to reduce non-value-adding effort

There are differences in work loads across various applications at any time that are causing overload in some teams and idle time in others

Cross-skill team members so they can be utilized in other applications during their times of lower activity

Develop a knowledge database so that tickets Sometimes additional work flows in can be resolved by the helpdesk. Eliminate the which could better be handled in root causes of repetitive tickets through earlier stages or which could be mistake-proofing, user training or permanent prevented entirely solutions Productive time is lost due to insufficient detail on tickets or through new requirements

Provide comprehensive templates to users to ensure all required detail about a problem is captured

Team members lose time and effort Strengthen ticket dispatch by instituting a due to misallocation of tickets to the dedicated dispatcher role, enabled by the team's wrong queue or person skills/ responsibility/ availability information There is over-reliance on repetitive manual testing

Introduce test automation tools or scripts, so that repetitive manual testing can be avoided

During the test cycle, defects from critical modules are found late, reducing the time available for fixing and re-testing

Perform test case sequencing so that critical or risky requirements are tested early, to allow sufficient time for the team to fix the defect comfortably

Significant rework is caused due to many defects introduced during design and development

Conduct causal analysis of defects to understand the root causes and standardize development processes to prevent them

DELIVERING LEAN PROJECTS:-Methods Lean is applied to Value Streams through structured methodologies and using a carefully selected toolset. We apply a very robust multi-stage approach to identifying and qualifying suitable Value Streams, and selecting the specific Lean Method that will be used for each Value Stream. (Method selection is done in the Initialization & Mobilization phase). Whilst in general, our proven Lean Value Stream Improvement method will be applicable, the business need should always drive selection of the appropriate method. The diagram below shows the nature and scope of the GBS Lean Methods portfolio :

Roles & Responsibilities on Lean Projects

Building Lean Capability and delivering benefits requires continuous (and rigorous) cooperation and coordination. There are some key roles that need to be in place to drive a Lean Program : • •

• • • • •

• •

Executive and country leadership - promote the use of Lean so that it becomes the preferred method for improving business processes Executive Sponsor - implement Lean thinking in an Account/ Department so that it is used to deliver benefits and becomes an integral part of business planning and operating Lean Deployment Champion - remove barriers for the use of Lean so that it becomes the preferred method for improving business processes Account Value Stream Owner - control the performance of an end-to-end process that delivers value to a customer Value Stream Manager - deliver rapid and effective improvements in business processes using Lean that realize benefits Stakeholder - liaise with the Value Stream Manager, Sponsor and others on matters that may enhance or threaten the benefits of Lean improvements Change Team Member - support the Value Stream Manager to create solutions that deliver high benefit and are adopted rapidly as the new way of working (generally about 5-8 Change Team Members participate in a Lean Project) Team Member - support the Value Stream Manager to create solutions that deliver high benefit and adopt those rapidly as the new way of working Lean Coach - accelerate the business benefits of using Lean by developing the capability of Sponsors and Value Stream Managers to a point of proficiency

Within the Lean CoE, additional roles support the global deployment :

LEAN METHODOLOGY AND TOOLS: INITIALIZATION & MOBILIZATION The final step is Mobilization of each Value Stream. Certain key roles need to be identified at this stage, such as Deployment Champion, Value Stream Owner, Value Stream Manager, Change Team Members and the Lean Coach. So the objectives of this phase are to: • •

Confirm the Value Streams with the parties involved Agree teams and sponsors

• •

Agree Project scope Agree launch launch date

LEAN METHODOLOGY AND TOOLS: VALUE STREAM ASSESSMENT:Materials for Lean Coaches: Value Stream Assessment Training The Lean Value Stream Improvement Method Assessment phase objective is to assess the flow of services or products. A Value Stream is a block of activities (Value Stream Steps) which starts and ends with the Customer. After designing a new and improved future state, the assessment phase delivers around 10 - 15 "Future State Components" (FSCs) or key actions, which are subsequently implemented in the DEDIC/DMAIC phase. (A further essential component of implementation is setting up a Test Cell to test the new process in a ring-fenced environment).

The Lean Value Stream Method is structured as a series of workshops: W0: Lean awareness and lean courier simulation experience; W1: Value Stream kick-off, scope, customer requirements definition; W2.1: Routing by Walking About; W2.2: Current State Mapping; W3: Future State Design; W4 Implementation Planning. During the Workshops, a variety of tools are applied to assess the current state and develop future state components, including SIPOC, Voice of the Customer, Mississippi charts, fishbone diagrams, seven wastes analysis, value stream mapping and more! The Value Stream Assessment Method focuses on two key elements: The Value Stream Team members are employees across the whole value stream people who really understand the day to day business. The Team reports out to key stakeholders during 3 report outs (W2.2, W3, W4) to provide the end-to-end process understanding and to gain commitment to move ahead. The 4-5 week assessment is followed by immediate Implementation. LEAN METHODOLOGY AND TOOLS: IMPLEMENT PHASE:Material for Lean Coaches: DEDIC Training In the Implementation phase, the methodology followed to further develop and execute the Future State Components differs according to the extent to which we know the root cause of the performance problem. In most cases, Future State Components (FSCs) use the DEDIC approach for implementation. However, in

situations which call for an in depth analysis of performance data in order to diagnose the root cause of the problem, the Six Sigma DMAIC approach should be followed. In either case, the FSC project requires around 15weeks to complete and reach the Operational Future State.

DEDIC APPROACH:The DEDIC methodology builds on the Lean Value Stream Assessment method and is used to implement the previously identified Future State Components (FSCs). It ensures Seamless integration of the lean value stream assessment and implementation of the changes. This structured improvement project framework is used to quickly and efficiently implement the best solution to known root causes.

The focus is on change and applying lean tools such as: • • • • •

Application of 7 Keys Benefits Tracking Brainstorming / Solution Selection Setting up the Test Cell Controlled Handover

DMAIC APPROACH:DMAIC process improvement methodology focuses on using simple data driven tools to analyze data, identify root causes and determine the ideal solution. DMAIC is best used when Data is required to identify root causes of a problem i.e when the root cause is unknown. Some of the key tools to apply are: • • • • •

Data Collection Plan Histogram, Pareto Chart Cause and Effect Diagram FMEA (Failure, Mode and Effect Analysis) Run Charts/Control Charts

Phases

Define

Define project objectives

Activities

Measure

Collect the data

Plot and Validate/Develop analyze data Project Charter Determine if special Identify quick cause exists wins and refine process Identify performance Determine measures Sigma performance

Analyze

Stratify process & data Develop problem statement Identify root causes Validate root causes

Improve

Generate Solution Ideas Determine solution impacts : Benefits Evaluate and select solutions Develop process maps and high-level plan

Control

Develop pilot plan Verify Sigma improvement Develop standardization opportunities Integrate lessons learned Handover to process owner (VSM)

Identified sources of variation Detailed process map Baseline performance

Updated process maps

Handover Future State Solutions Process maps documentation

Process control systems

Standards, Implementation procedures & Potential X's agreed Nominated Team milestones critical to DPMO measures process Improvement Key Definitions of performance Quantified Training impacts and Deliverables performance project measures and benefits Identified objectives Team benefits improvement evaluation Proposed opportunities Cause & measures & FSC replication effect Pilot and plan targets relationships Statistical solution results analysis of Organization data Prioritized structure Success stories risk impacts Detailed Implemented problem organizational statement change FSC Charter